The Importance of Having A Comprehensive Prenuptial Agreement

As you probably know, a prenuptial agreement is a contract that will generally protect each party’s pre-marital assets and potentially any assets purchased during the marriage. If you have already made the decision to enter into a prenuptial agreement, then it is important that the prenuptial agreement is: (1) enforceable (valid) and (2) comprehensive.

A prenuptial agreement that is invalid obviously does you no good.  When a prenuptial agreement is challenged, the Court will consider these factors in determining if the agreement is valid:

  • Execution (Signature) Date: It is good practice to have the prenuptial agreement fully signed at least one month prior to the wedding date. The closer the signature date is to the wedding date, the better the odds that a Court will consider the prenuptial agreement invalid. This is because, for example, if a prenuptial agreement is signed the day before the wedding, the Judge will believe that it was signed due to the “pressure” of getting married and therefore is invalid.
  • Each party has an Attorney: Although, it is not required that each party who is signing the prenuptial agreement have an attorney, it is highly recommended that this is the case. A Judge will not automatically invalidate a prenuptial agreement, just because one party (or even in the very rare case both parties) did not have an attorney.  However, it can be considered as a factor in judging a prenuptial agreement as invalid due to one party not having legal advice.
  • The prenuptial agreement is “fair”: Of course, “fairness” is in the eye of the beholder.  However, a completely one-sided prenuptial agreement will often be criticized and invalidated.
  • Not properly notarized: In New York, there have been a series of cases where the highest Court has invalidated a prenuptial agreement because they were not properly notarized.  In New York, a prenuptial agreement must include a properly worded “acknowledgment” – the acknowledgment is defined in the statute and usually looks like this:
    State of New YorkCounty of ____________ ss :

    On the ____________ day of ____________ in the year ____________ before me, the undersigned, personally appeared ________________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

Assuming the prenuptial agreement is valid, then you also want to ensure that it is comprehensive. Your prenuptial agreement should mention all of the following topics:

  • Separate Property and Assets: Virtually every prenuptial agreement will discuss each party’s separate property and separate assets.
  • Increase in Value of Separate Property: A prenuptial agreement should also discuss what happens if a party’s separate property/asset decreases in value.
  • Contributions of funds or maintenance of separate property: For many assets (i.e. marital home), each party may contribute fund or maintenance to the separate property. A comprehensive prenuptial agreement will make sure that this contingency is discussed.
  • Listing of current significant assets: In addition to discussing a party’s separate property, there should be an Exhibit or Appendix of each party’s significant assets and its approximate value. For example: Joe’s Real Property at 123 Main Street: $500,000
  • Retirement assets: All too often, parties forget to put their retirement assets in a prenuptial agreement. It is important that a prenuptial agreement includes the terms and conditions of how each party’s retirement assets will be considered in case of a diorce.
  • Spousal maintenance (alimony): Regardless of whether or not a part wants to waive maintenance or just rely on New York law, a prenuptial agreement should mention spousal maintenance and how it should be handled in case of divorce.
  • Attorney’s Fees: Similar to spousal maintenance, a good prenuptial agreement will also discuss attorney’s fees, even if neither party is seeking the same.

If you are contemplating entering into a prenuptial agreement, then contact David Badanes, Esq. and the Badanes Law Office, P.C. The Badanes Law Office has drafted numerous prenuptial agreements.

The Badanes Law Office main location is in Northport, New York with a satellite office in Nassau County. For clients in New York City, oftentimes the prenuptial agreement can be done remotely.  If you need a prenuptial agreement, then call the Badanes Law Office today at 631-239-1702 or email us at dbattorney@optonline.net.

How Many Years Do I Have to be Married to Get Alimony in New York?

Technically, you could be married for one day and still be eligible for alimony (what is called spousal maintenance in New York). This is because the Court can consider several factors in determining whether or not to award alimony. Although, the number of years that you are married is a strong factor, many other factors can lead to alimony.

In reality, you usually have to be married for three or more years to be eligible for alimony. A Court will typically think that a one- or two-year marriage is too short for a spouse to be eligible for alimony. However, as stated above, even a one- or two-year marriage can be eligible for alimony.

In New York, as of 2016, the Courts now use a formula as a guideline to determine how long you should pay alimony.  That formula is represented in the following table:

  Length of Marriage   Duration of Maintenance
  0 – 15 years   15% – 30% of length of marriage
  15 – 20 years   30% – 40% of length of marriage
  More than 20 years   35% – 50% of length of marriage

As you can see, even in a short marriage, a Court can award maintenance for a period of time. It is important to note, that the above table is a guideline and is not a strict formula. Each marriage and each divorce is different. So a Court could be presented with two cases, with the exact same number of years of marriage, yet award different lengths of alimony.

If you have more questions about alimony, then contact David Badanes and the Badanes Law Office today at 631-239-1702 or email at david@dbnylaw.com. The Badanes Law Office has offices in Northport, Suffolk County and in Uniondale, Nassau County.

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Why NOT Having An Attorney Can Hurt You

Although, you have the right to represent yourself in your divorce or in any other legal matter, you do so at your own risk. Recently, I was in Court waiting for my case to be called. While waiting, there were two cases that were being handled by the Court in which one of the parties decided to represent themselves. Each of these cases provide a good example of why NOT having a divorce attorney can hurt you.

CASE #1: Child Custody Case

This was a child custody case. The Mother represented herself, while the Father had an attorney. They had one child together. Prior to the summer and prior to going to Court, the Mother had most of the parenting time with the child. However, for the summer, she decided to let the child spend most of the time with the Father.

Now, after the summer, the Father brings a petition for custody to the Court. The Judge asks a lot of questions to both sides. Then the Judge asked the ultimate question to the Mother, which was: “Do you want to continue to allow the Father to have most of the time with the Child once school starts?”

If the Mother had an attorney, she would have known that the best way to answer this question was a simple “No”, with the second best answer would have been “I need time to consider this question.”

Instead, without an attorney, the Mother asked the Judge: “What are my rights?”.  Since, the Judge can’t represent the Mother or give legal advice to the Mother, the Judge took this non-responsive answer as a way of saying that she was “OK” with the Father having the Child most of the time.

It was clear to me that without a child custody attorney, the Mother “froze” and was “unprepared” for the Court proceeding. With an attorney, the Mother clearly would have done much better.

CASE #2: DIVORCE CASE

This was a divorce case, where the Husband decided to represent himself and the Wife had an attorney. The parties had no children and so the only issues to be decided were the distribution of assets, spousal maintenance (alimony) and attorney fees.

Here, the Wife was the so-called “monied spouse”, as she earned significantly more income than the Husband. During testimony, the Husband testified that he owned the marital home prior to the marriage. It was only several years after the marriage that he put the Wife’s name on the Deed. What the Husband did not know was that his testimony was not sufficient to allow him to claim a credit for the portion of the home that was his “separate property.” If the Husband had a divorce attorney, the attorney would have brought forth evidence of how much the home was worth at the time he put the Wife’s name on the Deed. In this way, the Husband would have been entitled to a credit equal to that amount.

Because the Husband failed to put forth the correct evidence, he lost out on hundreds of thousands of dollars.

If you are getting divorced or have any issues involving children, you need an experienced attorney to represent your interests.  You might think that you can represent yourself, but, there are too many areas of the law where you can make a vital mistake.

David Badanes and the Badanes Law Office, P.C. have represented hundreds of clients and can help you.  If you need an experienced divorce or child custody attorney, then call David Badanes and the Badanes Law Office at 631-239-1702, email at david@dbnylaw.com or visit our web site: www.dbnylaw.com.

The Badanes Law Office main office is in Northport, Suffolk County and he has a satellite office in Uniondale, Nassau County.

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In A Divorce: When Does One Thousand Dollars Not Equal One Thousand Dollars

Assume that I owe you $1,000.00 (One Thousand Dollars), I could pay you back as follows:

  1. One Thousand Dollars in one lump sum in one month’s time.
  2. Two payments of Five Hundred Dollars.
  3. Five payments of Two Hundred Dollars.
  4. One Thousand Dollars in one lump sum, but I’ll pay it five years from now.
  5. One Thousand payments of One Dollar.

Most people would recognize that the fourth and fifth options are not fair and although each one adds up to One Thousand Dollars, because of inflation and the time-value of money, it is not really One Thousand Dollars.

This illustrates the “time-value” of money. In other words, money today is worth more than money tomorrow. As time goes on, inflation reduces the value of your money. So, even if I pay you $1,000 in five years (as an example), its real worth would be something like $950 – $990, depending on inflation and other factors.

Therefore, in a divorce, when you are making or accepting payments, you have to take into account the time-value of money. Typically, if you owe money, it is better to pay it over time (this assumes that there is no interest payments). Alternatively, if you have to pay money and have to pay it in one-lump sum, you can argue that because your money today is worth more than money in the future, that you deserve a discount in what you pay.

For example, if you have to pay spousal maintenance (alimony) and your payments come out to $1,000 per month for 5 years, for a total of $60,000, then you might want to agree to pay a lump-sum of $55,000. Your argument would be that a lump sum payment of $55,000 is worth more than 5 years of payments, with each payment of $1,000.

Pre-payment of amounts owed can work in many situations, not just for a payment of spousal maintenance. However, typically, you cannot pre-pay your child support obligation.

If you are considering getting divorced or are seeking a new divorce attorney on Long Island, then David Badanes and the Badanes Law Office can help you.  David Badanes can explain how the time-value of money can help your situation.

If you need an attorney to represent you in your divorce, call David Badanes, Esq. and the Badanes Law Office, P.C. today at 631-239-1702 or email me at david@dbnylaw.com. The Badanes Law Office has offices in Northport and Uniondale.

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Divorce and Rising Gas Prices

Every day, it seems that gas prices are getting higher and higher.  Even, if gas prices go down a bit, it is likely that in the future, the price you pay for gas is going to be more than the price you paid more than a year ago.

How does inflation or the rising price of gas affect your divorce?  For example: What if you have been divorced for several years, can you request additional child support or additional spousal maintenance (alimony) due to the increase in the cost of living?  What if you are the parent responsible for transportation expenses, are you able to get a modification of your child support obligation?

Whether or not inflation will be a basis for obtaining a change in child support depends on a few factors.  Typically, you have to show that the cost of living has gone up by more than 10% (since the time your order went into effect or the last time it was increased).  If your child support order is through the Support Collection Unit, then they will typically automatically compute whether or not there has been more than a 10% increase in the cost of living.  When the cost of living has increased by more than 10% (cumulatively), the Support Collection Unit, will also automatically increase the amount of child support that you either have to pay or that you receive.

However, if your child support order is not through the Support Collection Unit, then it is up to you to demonstrate to the Court that the cost of living has increased by more than 10%.  You would have to file a petition to Family Court to get an increase in child support.

Since gas prices are just one component of inflation (or the cost of living), increased gas prices, by themselves, may not be sufficient for obtaining a modification of child support, spousal maintenance or for transportation expenses.

Another basis to obtain a change in your child support is to show that the child support order is more than three years old.  Here, you might be able to get an increase (or decrease) in child support, simply because the last change is more than three years old.  If your child support order is more than three years old, then even if the cost of living has increased less than 10%, then you may be able to get an increase in child support.

In summary, no one likes paying more for gas, however, the increase in the price of gas may not be enough to qualify for a change in your child support or spousal maintenance.

David Badanes and the Badanes Law Office provides real world advice and can help you in your divorce.  If you need an experienced divorce attorney, then call David Badanes and the Badanes Law Office at 631-239-1702, email at david@dbnylaw.com or visit our web site at www.dbnylaw.com.

The Badanes Law Office main office is in Northport, Suffolk County and he has a satellite office in Uniondale, Nassau County.

Please like us on Facebook to get important legal news, tips and articles: www.facebook.com/BadanesLawOffice.

What Is The Alimony Recapture Rule And How To Avoid It?

You may know that if you are paying alimony (or as it is typically called in New York, spousal maintenance or spousal support), that your payments are a tax deduction. However, there is a little-known rule called the Alimony Recapture Rule. If you fall into this rule, you will not be able to deduct your alimony and worse yet, the alimony you previously deducted will be counted as income.

The rule only applies to alimony payments during the first Three calendar years AFTER the divorce is final AND

a.) The payments in the 3rd year decrease by $15,000 or more from the payments made in the 2nd year; OR

b.) The payments made in the 2nd year and the 3rd year are substantially less than the payments made in the first year.

Here are two examples of when the Alimony Recapture Rule applies:

Example 1:  In the first year you paid $20,000.00 in alimony and in the second year you also pay $20,000 in alimony, but, in the third year you only pay $5,000 in alimony.  Here, your alimony payments decreased by $15,000 from the 2nd year.

Example 2:  In the first year you paid $24,000 in alimony, but, in the 2nd year you only paid $10,000,00 and in the 3rd year you only paid $5,000.00.  Here the payments you made in the 2nd and 3rd year are substantially less than what you paid in the first year.

In the examples stated above, you will have to report as income all three years of deductions that you took as alimony.

There are some limited exceptions to the Alimony Recapture Rule, but, you should consult with an accountant for more information.

It is fairly easy to avoid the Alimony Recapture Rule. When calculating your alimony payments, make sure they are not front loaded and that the amount you pay does not violate the rule.

If you need an attorney, call David Badanes and the Badanes Law Office at 631-239-1702, email at david@dbnylaw.com or visit our web site: www.dbnylaw.com.  The Badanes Law Office has offices in Northport, Garden City, Brooklyn and Manhattan.

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Are Alimony Payments Deductible in New York?

bad alimonyAlimony is sometimes also called “spousal maintenance” or “spousal support” payments. Regardless of its name, alimony payments are deductible in New York. However, it is important that your divorce agreement (usually called the Stipulation of Settlement) explicitly states that any alimony payments made are deductible.

You should always make your alimony payments by check and not in cash. You should always keep a record of your alimony payments.

When you submit your tax returns or consult with your accountant, make sure to inform your accountant that you have made alimony payments.

If you are getting divorced and need more information about alimony (spousal maintenance or spousal support), please call David Badanes and the Badanes Law Office. David Badanes and the Badanes Law Office have helped numerous individuals with their divorce. Contact the Badanes Law Office today at 631-239-1702 or email us at david@dbnylaw.com. The Badanes Law Office has two offices in Long Island: Northport and Garden City.

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